Private equity AI whitepaper
The impact of AI on private equity portfolio management
Key research findings
AI is a constant topic of conversation in the technology and business worlds, and billions of dollars have been invested already. The private equity space is no exception. Download the full report to learn more.
73%
of PE investors reported AI-powered predictive analytics drive major value for their company.
34%
report measurable returns on AI investments within 1-2 years.
79%
report that their portfolio companies have implemented AI solutions in the past 24 months.
Over 50%
expect AI to save their firms 20-29% in time or money over the next 5 years.
JAN. 10, 2025
24 Min Read
AI investments provide measurable returns. Sometimes in as little as one year.
Lumenalta’s survey of private equity professionals reveals AI's transformative impact on the industry, showcasing rapid returns and widespread adoption. AI is revolutionizing investment decision-making, valuation processes, and opportunity identification, while also presenting new challenges. Many private equity companies quantify the ROI from AI usage by how many hours are saved. Because these tools are expensive, the hours saved need to be utilized for more valuable activities or to improve the efforts of existing human capital.
AI enhances data analysis, predicts market trends, and uncovers hidden investment opportunities. However, firms must navigate challenges such as data privacy concerns and algorithmic bias. Successful integration involves adopting AI-driven analytics tools, training staff, and continuously updating AI models to reflect market dynamics.
Utilize AI for data analysis (the top application in private equity)
Anticipate AI will have a moderate to significant impact
As AI technologies advance, their impact on investment strategies, risk assessment, and portfolio management is expected to grow. Companies with strong AI capabilities may have a competitive edge in attracting investment, highlighting the increasing importance of AI expertise in the C-suite and dedicated AI roles within organizations.
Additional insights from the survey include:
- Al-powered machine learning, natural language processing, and computer vision are key value drivers for portfolio companies.
- Retail and healthcare are identified as industries most likely to be disrupted by AI
If you want more insights into the ways that private equity can leverage artificial intelligence for significant gains in efficiency and returns on investment, download our report today.
This report presents findings from a proprietary survey of private equity professionals on how they are prioritizing AI implementation and seeing returns on investment at both their firms and the businesses that make up their investment portfolios. Survey responses indicate that data analysis, accounting/payments, and customer support see the most significant use cases, including using LLMs to evaluate new investment opportunities and create “study guides” that make detailed information more concise and precise.
This report presents findings from a proprietary survey of private equity professionals on how they are prioritizing AI implementation and seeing returns on investment at both their firms and the businesses that make up their investment portfolios. Survey responses indicate that data analysis, accounting/payments, and customer support see the most significant use cases, including using LLMs to evaluate new investment opportunities and create “study guides” that make detailed information more concise and precise.
FAQs
How is AI transforming investment decision-making in private equity?
What role does AI play in evaluating the value of potential investments?
Can AI help identify emerging investment opportunities in private equity?
What are some potential risks or challenges associated with using AI in private equity investments?
How can private equity firms integrate AI into their investment processes?
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